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Book TV After Words

John Mackey Education. (2013) 'Conscious Capitalism.'

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United States 6, Us 3, Hollywood 2, John Mackey 2, Washington 2, Spokane 1, Milton Friedman 1, Hong Kong 1, Singapore 1, Austin 1, Pfitzner 1, Friedman 1, Frederick Haayek 1, Morrell 1, George Gilder 1, Ludwig Von 1, Bush 1, San Francisco 1, Etc. 1, Gallup 1,
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  CSPAN    Book TV After Words    John Mackey  Education.   
   (2013) 'Conscious Capitalism.'  

    February 10, 2013
    9:00 - 10:00pm EST  

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and building, you know, a common commitment to taking, you know, constructive action. so i hope you will be among those, um, who think creatively about new forms of media that can reach people. it is my great hope and prayer that we will see out of hollywood one day a movie that depicts the struggle of a young man or a young woman coming out of prison and the challenges they face and the heroic efforts they make, um, to survive on the outside that tells a different story than the one that we have been fed for so long about the criminals and what ought to be done with them. ..
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lubber rating of the heroic spirit of business. and yet he argues that capitalism doesn't have to be a zero sum game in which some when at the expense of others. he highlights the practices of companies like whole foods and southwest that seek to increase their shareholders by creating value for their customers and employees as well. it is about an hour. >> host: it is a delight to see you again.
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let's set the stage for this. some people are going to take up this book and see the title and they are going to think here we go another guy that doesn't like capitalism who has a lot of criticisms of it and he made money as ceo he's probably feeling guilty. the fact is that you are quite a ferocious capitalist and what is interesting to me is you were not necessarily born that way but somewhat of a convert and you talk about your younger life as a young man, a self-described progressive in the housing co-op, a food co-op, we start a business. you said you embraced the ideology that business and corporations were essentially evil because they sought the profit. then you start your business and the next thing you know you are reading frederick haayek and then we have whole foods.
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talk about conversion of what you learned in your early experience and how you came to the point you are now writing the book not just calling capitalism a hurlock enterprise but talking about the way in fact you want to defend it and improve its. >> first thing to understand is i am very idealistic, and of course i'm a great believer in capitalism. i think business is heroic. it has lifted humanity up out of the dirt and some of the statistics we discovered as we researched the book a couple hundred years ago, 85% of the people live on less than 1 dollar a life and that is in $2, that is down 16%. illiteracy rates across the planet for over 90%. today they are down to about 14%. the average life span is about 30 and today it is 68 petraeus 78 in the united states and 80 in japan so that humanity has made great progress and we are
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great believers in what business has been able to do. it's actually not the villain, it is the good guy. but when i was starting out i went to the university of texas and austin and was a progressive city and i just sort of -- i didn't study business. i studied philosophy and religion and world literature and history and pretty much the humanities. when i started the business i had no economics and business or anything but i knew that i was going to have a really low prices and i was going to pay really well, and there was going to be a different kind of business because it wasn't going to be like those of their businesses. and of course, once you get into the real world and have to meet a payroll and have to pay your bills and you are undercapitalized, your philosophy of business can he vault. it's interesting to me because a
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lot of my friends from the movement saw me as a trader that i have become gone over the dark side. yet the business was struggling. we managed to lose 50% of the capitol. we started with $45,000 lost 23. my girlfriend at the time that co-founded the business with me, we were living in the store on the third floor making $200 a month each. we below minimum wage even back then. so, i just began to move away from the philosophy. as i was trying to figure not business, i started to read -- i read hundreds of books, everything that was available i read it and to try to understand how to make the business successful. at the same time, i stumbled onto people like ludwig von mises and george gilder and dozens and dozens of other thinkers and i realized their
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explanations for how the economy worked and society worked made a lot more sense than sort of the half-baked philosophy i had as a so-called progress of test. sali abandoned that philosophy. it didn't work read in the real world was proven to be very unsatisfactory. so that's kind of how i got started on it. it's not so much the economics of to me to become a better business person so much as they just gave me a world view that made sense of what business was actually doing and what i was doing as a business person. >> host: so you come to capitalism and you now understand all of these ideas like the voluntary exchange process to the bill not only creates good businesses that helps society. what is conscious capitalism and how does it differ from what many of us would call plain old wonderful capitalism?
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>> guest: first to understand we think business is good. and it's has a great value but it can be better. it has a greater potential that is realized. and when you understand when you look at the gallup poll for example, it shows big business in the united states has an approval rating of 19%, 81% do not approve of business. when you see that even in the congress is 17%, which is about the same level only a couple of points below, you realize that people have lost confidence in business. and then narrative about business and capitalism has really been controlled by the enemies of business and capitalism. if you study history you will see business people have always been held in sustained throughout of history if a lot of business wasn't done by the elite, they were done by common trade and business was something
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that fell on the shoulders of minorities such as the west and in the east the chinese who through hard work and enterprise often made a success of their lives and they made money and that created in the and persecution. they run out of one country after another supposedly because of different religions and contributed to it, but a big part of it was they were economically very successful and that was sustained by the intellectuals. intellectuals have always hated business. and we can get into why that might be the case if it is serving a useful purpose. but the most important thing to realize is intellectuals are not the friends of business, not in the past and certainly not today. so the business is painted as fundamentally all about money. it's selfish, greedy, it's explicative and it only exists to make money.
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i think if you go to a cocktail party and ask somebody randomly what is the purpose of business, people will give you a lot of luck because they will probably see what do you mean what's the purpose of business pacs the purpose of business is to make money but that is an odd the answer because if you ask doctor what their purpose is, they also need to make money but they won't say my purpose as a doctor is to make money. no, doctor kiel's people. teachers educate, architects design buildings, engineers construct things, journalists hopefully are hoping to uncover the truth. a potentially have the high purpose of discovering what's been hit in and bringing it to life and getting a good interesting story that hopefully is also truthful. >> host: hopefully. >> guest: so the professions i will refer back to some higher purpose that serves other people and creates value.
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if it is a value creator in the world creates the goods and services that make our lives better. business creates value not for a few. it's not a zero sum where somebody wins and loses. it's for the customers, its employees, its suppliers, for its investors and the communities that it's part of. all of that is done through voluntary exchange, so the business is fundamentally good. as we point out in the look of a great potential to be heroic lifting the humanity of the higher level. >> host: the doctor gave you the greater purpose. whether the aspects of capitalism? >> guest: we identified the tens of conscious capitalism their somewhat interdependent so you can't take them in isolation the work together in a
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synergistic fashion. his business has the potential to be beyond making money. it's not that there's anything wrong with making money. that's one of the things it does is create value for its investor stake holder is but just as my body produces red blood cells if i stop producing red blood cells i'm going to die but the purpose of my life isn't to produce red blood cells and similarly the business cannot exist if it isn't profitable. it will not have the capitol it needs to renew itself, to innovate and repair equipment, to be able to respond to competition so part of it is essentials to business but every business has a potential for the more transcendent purpose beyond that just as the other professions do. first business has to discover or rediscover its high your purpose and by the way most entrepreneurs to create the business in the first place are motivated by a high purpose and
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they may not be conscious of it. it may not be as explicit but i know hundreds of entrepreneurs and only a few exceptions will they tell me i'm in the business to get rich. they were on a five-year about something where there was some idea, something they wanted to create, some difference they wanted to make in the world. another reason just than to show that they could do it and it's only leader when the business matures but we hear the economist come in and interpret that it's all about making money. so first higher purpose and the second is that capitalism that we have the stakeholder system that it's not just about creating value for the investors that there are other stakeholders that also matter and they are independent. the customers matter, the employees matter, supply years, the communities they were part of, and so do the investors.
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a simple example lawyers oftentimes is the retailer that kind of explains this is the whole foods market we try to hide your the best people we can find. make sure they are well trained and management job is to help them flourish in the work place to give the tools they need and make sure they are happy because they are the ones that serve the customers. so happy team members serve and create customers and happy customers create heavy investors because the business flourishes so all of them are interdependent. 100,000 the suppliers we do business with around the world. it's essential that they also flourish and create the competitive advantage. they help create a unique product and service that makes the whole foods market stand out on the marketplace.
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once you realize a business is creating value not strictly for its investors but for the investors as well but all the stakeholders are somewhat interdependent you begin to view it as a system, an integrated system and begin to ask questions such as what strategies can we do in our business that allows all of our stakeholders to simultaneously flourish. >> host: what are some of the things you do? >> guest: the more important question might be what do you do that might not result in creating the win-win scenario. those might be strategies where one stakeholder is gaining in the mother is losing that you might see in business for example we need to get profits up up so we are going to raise the prices and cut the wages and benefits backend grind our supply years down and that's going to result in higher profits which it might in the short run but it is such a
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negative feedback defined the prices high to begin to go to the competitors and the wages are low and benefits are not as good so the employees began to take jobs away with other companies. suppliers don't have to trade with you and if you go down they will eventually phase you out and potential customer would deemphasized you as a customer. so they are all connected together and the strategy that you have to do is how do we create value so that they are all simultaneously winning. i will give you an example. we created a foundation which does microcredit loans of around the world and a developing countries. the communities that were trading opened the project in costa rica with ben bananas, mangoes and we will be looking to the credit.
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with of the investors' money that is a type of you should be philanthropic with your own money and on the narrow sense you could make that case if it doesn't create value for the investors but what we found with that foundation it's creating value to customers we market it in the stores and in a campaign where they are able to donate their change to this process we've gathered $5 million last year from the pennies and nickels and dimes leftover from people's change coming in at the customers are connected to it. we market online the and received hundreds and hundreds of letters from the customers' enthusiastic about the foundation is doing to help in
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poverty to be the team members participate in the payroll deduction if they wish and also have a volunteer program or the team members can volunteer in some of the countries that were doing the microcredit loans and that is a transformative experience for many of them. i would say there's nothing the company has done that has raised the morrell hired. people are so proud of what they've done and in just eight years we have helped over a million people. 93% of those are women to have better lives. they're able to purchase of eight in that and if they contribute to the whole planet foundation and we advertise and market that in the stores as a supply year alliance so that gives greater exposure so that's a win for the suppliers to participate. it's a good for the investors? absolutely. we have received millions perhaps tens of millions of dollars of positive publicity
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and good will in the communities that's helpful foods markets brand to be better known in the stock lost about the world and as a result investors as well so all the stakeholders are winning. that is a win-win strategy. >> host: something you might ask if whole foods isn't in the situation if you talk about purpose you didn't mention when you laid out in the buck you give people choices for a healthier eating and there's a number of things it is a missionary field to the company. ken every company to this? for instance if you are the world's largest creator of washington parts can you have a higher purpose as it were and orient your company are not the big ideas the way that
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wholefoods kim? >> guest: my first point to that is a grocery retailing is as monday in a business so the fact that we've been able to fund a high purpose is to use and the example of a washing machine parts. think about what washing machines do and how they have liberated mostly women from drudgery washing clothes in the rivers and streams and washing them in their sinks by hand it is time consuming and not the best use of people's attention and times of the washing machines themselves have been a great technological lead advance for humanity. if you are making parts to that, the high purpose should dovetail you want to create the very best
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washing machines that can reach the widest market possible you are actually contributing to the advancement of humanities and i think then you should see it and market that way. assuming you can always find exceptional cases where somebody is dealing with a product that is actually really deeply harmful for people, so i'm not saying that this is applicable to every business that exists but it is applicable to 99.9% of them. >> host: let's talk to what this is not because people will get the title of this book and if they haven't read it, their first thought is going to be the this is an explanation lowercase for corporate or social responsibility and you are in the book that is not what this is about and it is corporate social responsibility you see often activists using pension funds using proxies' to try to push companies to change their
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policies often environmental policies, labor policies in ways that these groups think are the corporate thing to do. what is different between that movement and what you are activating here because you talk about how the companies need to do what is right. that is a part of this argument. >> guest: of course and most people that first hear about this people don't like to create new categories in their mind. if it'll be good category called corporate responsibility, so they think it is another version of that and it's not. it is another way to think, it is a new paradigm for thinking about business and it does not fit within that total box so early on in the look we make an important to differentiate the cost of capitalism from corporate social responsibility and the biggest difference is corporate social responsibility is just a traditional business
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model its social responsibility because they think it's going to appease the critics. the report for public relations and marketing to the brand of the company they are often times accused of brainwashing to give you are just doing this for their reputation purposes. it's not really -- it is just relief in. it's not deep and the conscious capitalism takes a community and environmental stakeholder the key major stakeholders in the organization that you are trying to create value for and it's part of why you exist as your purpose and a part of your mission to do those things cities are not grafted to try to make you look better. they are at the essence of who you are carried to talk about a
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conscious business whether they are responsible or not is almost a silly question. of course they are socially responsible. and apparently they are creating value for customers and the employees and for their suppliers, for their investors and almost without exception they create a value for the communities that they are part of if they don't try to create the value for their communities per say the fact they are creating value for customers and employees and suppliers and investors is already inherently socially responsible. business doesn't have to redeem itself if it is under bad or evil or ethically neutral and then do it through good work. business is inherently good if it's creating value for all the stakeholders. we think you can go beyond that and also create value for the communities as part of what your
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purpose and mission is. >> host: you talk about your business is inherently good and one of the purposes of the book and it's interesting because it is a story of whole foods and it's partly an explanation and a how-to guide for some companies that might want to try this. talking about business being inherently good, you mentioned in the book the fact that this is more necessary than ever because the business has gotten a bad rap in particular the recent years especially after the 2008 financial crisis. business would do a great deal to help itself of attracting more in a way like this and it's just sitting in a sample. i'm curious what you think role of the ceos in talking about capitalism and defending capitalism a as can you talk about a role of government sometimes and how it works against the business? thus ceos have a role in
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talking about and defending capitalism and explaining it to people or is it something that you purely due by example? >> i think we do to be one of the most disturbing statistics for me is you have to understand in the history of the united states we started out really poor. we were blackwater in the united states and as we embrace capitalism in the united states, which add tens of millions of immigrants come over here to create a better life for themselves because they had more freedom, more freedom to enterprise, they had the freedom to start businesses to bid for the longest period of time well over 100 years the united states was the freest nation in the world and economic freedom was the most capitalistic in the world without exception. in the shorter period of time ago it's the year 2000 for
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example the united states ranked number three on the economic freedom index behind hong kong and singapore. we were not number one but we were still number three against pretty dynamic economies but over the last 13 years we've dropped down to number 18. when people ask what's wrong with the economy why do we have such high unemployment, why has disposable income on a per capita basis why is the declining and has over the last ten years? the answer is right there. we are less economically free today than we were 13 years ago and as our economic freedom declines. it's the basis for the prosperity which is business is lessened in the prosperity is therefore declining as well.
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so does the prosperity. at the capitalist, if the business people are not willing to speak up for the capitalism we can expect it to continue to listen and american prosperity will continue to listen as well. we are far from being in the free enterprise capitalist system any more. we'll move towards the crony capitalist tax system where we have a big government and business oftentimes colluding with each other. the example was the fiscal cliff a bill that passed and we look beneath and when you see is payoffs for the organizations such as hollywood, alternative energy that there are all kinds of special deals being cut and we are moving away from the system people think it is fair and this is a system you can get ahead through hard work where
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they think the way to get ahead is to be politically well-connected and that is a problem. >> host: does the government intrusion also get in the way of this type of a philosophy conscious capitalism? you talk a lot in the book about the need for businesses to not be holistic but to the long-term lot about hitting their quarterly targets but about these bigger objectives and how to roll out over a longer time horizon and a lot of businesses would say it's nice if he says that but the rules make it so hard for us to have transparent discussions with our investors and actually say what we are thinking and waiting in the wings of the lawyers that will finally strike suit every time we don't get the numbers of recorder their argument would be that there are a lot of cultural aspects that are in place that work against of thinking this
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way. >> let me make a couple of responses to that. the first one is you have to see that why do we have such regulations in the united states and why are they growing so much clacks they are growing because in a sense people don't trust business any longer. we no longer have the widespread consensus that business is good. as i mentioned previously with a 19% approval rating it isn't seen as fundamentally trustworthy in our society. and i remember seeing it i can't recall "corporation," that portrayed the business has is a bunch of sociopaths only looking out for themselves in the bottom line and that is how many people see corporations in the world today. so we have allowed the government to increase to such a large scale that people in our society have because we want the government to protect us from these sociopaths. as long as you see the
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corporations primarily sociopathic, then the rationale for the government to protect us from that sociopath is pretty compelling to the business itself has got to discover its entire purpose and to act in a different way and improved the overall rating to get up to 90% and then the press for the regulation to control and protect us from the sociopathic corporations are lessened because it would be self regulating and self policing. so i sort of blame the business for falling under the influence of the critics and beginning to ask in ways that are detrimental to the long-term best interest. >> do you think as someone who lives in washington writes about politics do you think that if 100% of the businesses were today part of the conscious capitalism movement that this president wouldn't have introduced the health care and all of its regulations? >> i doubt he would have been elected. [laughter] >> interesting thought.
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i want to ask in terms of the impediments to doing something like this, you have thought about this deeply for a long time and hopefully you have had elements of your philosophy from the beginning of its creation. what do you say to companies who would say look if i were starting out how fabulous, i would love to do something like this, but there is no way in my business right now with the unions i have in my business, contract i have been my business and the regulations i already have on my business to reorient myself and a branch my purpose and align all of my stakeholders how do you do that? >> there's no question that it's a lot easier to start a business than it is to transition to one. if you have long legacy and a strong culture that's antithetical to eight it
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certainly will require visionary ceo and leadership to make that transition thing. but it's my opinion the companies are going to dominate the 21st century landscape. for one simple reason it works a lot better. it's a better way to do business not just because it is ethically better but because it wins in the marketplace. we need a lot more research to prove the point, but we started in the appendix where we talk about how these conscious businesses have outperformed, not by a little bit but a lot from the last 15 years, the companies that we identified are outperforming the s&p 500 by 10x0315 year period that is a pretty phenomenal track record. >> host: do the outperform someone like an oil company? >> guest: they can be conscious as well, and again, it is one of the energies that get
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lifted out of the dirt so there's nothing inherently bad or evil about the company so they need to take the concerns very seriously but they can create for their suppliers and think of a higher purpose so there is nothing that disqualifies them in their consciousness mass. what ever works better works in the marketplace isn't in if it doesn't work better it doesn't matter if it will spread or triumph in the marketplace but what we are seeing is this type of philosophy is going to triumph in the marketplace so companies will either begin to transition to the more cautiously of being more they are going to fail and become dinosaurs and go out of business and the entrepreneurial companies will be the ones to take their place. many of those that we admire they did in texas 15 or 20 years
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ago or certainly not 40 or 40 years ago. the companies that change the lives and the world for the most, google didn't exist 14 years ago, facebook didn't exist ten years ago to its phenomenal. the whole internet phenomenon is less than 25 years of age. so, there is no amazon. the legacy companies will have to evolve or they will be out competed in the marketplace. it's not tomorrow, but in ten years we will be in a different landscape certainly 20 years, and i would like to envision this and see if i'm correct. >> host: such a deal. i should point out there is a think tank not for profit called conscious capitalism that the members and ceos are designed to help people figure out how to do this.
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>> guest: is a nonprofit but if you type that and you will get to it is a nonprofit organization we have a couple conferences a year. we do one for the ceos, so it is more of a sea level conference it is a little smaller and elite kind of gathering but we are going to do something in san francisco april 5th and 6th that we are hoping to get a couple thousand people in that event where we can begin to spread these ideas further now that the book has been launched so we are trying to start a movement. look, our society is in decline and unless we reverse it and began to rediscover a higher purpose as companies and businesses begin to think about the greater good of all of this the cultures i think that the decline is going to continue. we are going to see more and more government intrusions and less of a free society. and i love our country so i feel like i want to do what i can to reverse that. >> host: i have to ask, and you mentioned this in the book,
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a lot of this you talk about not just aligning stakeholders and having a purpose when you talk about the contras' leadership and culture and a lot of that is uplifting to talk about the ceos having more integrity, they needed more trust and transparency. you actually talk about love in the workplace and as i said you could get done with this and really feel inspired. i have to ask how a lot of people will wonder how that measures with one of the things that they know you for which is this event a while ago where the fcc was looking into you because you for posting yahoo! against the competitor under anonymous names and critical comments about a competitor. some people might say okay. how do you write about all of those things and reconcile with that even to and since you bring it up in the book, i do want to ask about it now. >> guest: i may be the only
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person in the world that doesn't see this as a contradiction. i don't see it as a big deal. the media sensationalized what happened and because i was under investigation -- which was dropped -- i wasn't able to defend myself. i couldn't write or do interviews for post on my blog, i couldn't do videos, i had to be silent. so the whole thing was sensationalized and it was a smear. i get asked that question all the time so let me respond to it. first of all, what i said over and eat your period is in the record. anybody can still go on to yahoo!, do a search and you can see all of the -- i'm not ashamed of what i wrote. i am proud of what i wrote. i wrote intelligent and thoughtful postings and as part of the anonymous thing that is one out of proportion because people are not familiar with how
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the financial bulletin boards work. a good metaphor i like to say is when you go to a masquerade party at halloween your costume and so is of reveals. are you deceiving people and trying to pretend you are not kim when you are in the costume crux not because that isn't the party come to war in costume and so is of reveals what you want a financial litton board like yahoo! you take a screen name and everyone does give people don't post under their real names, not trying to deceive anyone, it is like a masquerade party your posting as an anonymous person which is a good thing that allows the power of the ideas to try and. in terms of running down a competitor over and eat your period in the 400 posts i probably had a dozen or so critical of the wild oats. those are the ones the were ripped out of context and repeated all over and over to
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the dhaka criticized whole foods from time to time as well and for me it is hard for people to understand. but it was as a form of play. i had no diabolical motives i was trying to drive the stock price down as if a poster name could affect the markets nobody paid attention and how many people read those posts it was the community and we were just debating because i like to argue and the ideas as i defended the whole foods market and i occasionally criticized wild goats and if not as a smear that i was trying to drive down the stock price, that is nonsense because i hadn't posted on the bulletin board for eight months prior to beginning the negotiations and second because again, and the anonymous post doesn't affect markets and i've never heard anybody stock price
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nor did i intend that. so, i was having fun. i am very playful i and i enjoyed the debate about the subject and the most passionate about which is wholefoods market. it's usually defending the company against the shorts that were telling lies about the company and i would go in and i would take my sword of truth with what i could disclose as a public company and basically defend wholefoods from the record. i was glad i did it and in hindsight of course if i had ever known anybody was going to care about that i wouldn't have done it. that's why i learned a valuable lesson but i am not embarrassed or ashamed of what i said. i challenge the viewer to actually read what i wrote. >> host: what's de date a little bit about the bigger ideas because there is no question there will be a debate about the notion. you've already had it. since 2008 you have had a lot of
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different ideas coming out about how the business should restore itself. there's different talks about different forms of the company with the bottomline benefit corporations on all these different ideas are you can improve capitalism. capitalism doesn't need it to be removed. you mentioned this in the book you had a fascinating debate back in 2005 with milton friedman of all people and i actually advocate everyone going to read it to be there was an incredibly thoughtful exchange. now, he made the point, she would make the point that look, capitalism the great duty of capitalism faugh pfitzner statistics parkhurst kick the argument is you are a company and doing your job the right way
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and customers are getting great products and willing to pay for them faugh investors are making a return employees are happy because business and a growing and there's opportunities for advancement and greater pay and this is reasonable. it's one idea that everyone can you night and agreed and then of course there's the side benefits that you mentioned in the book that go to the society to centralize the money everyone is allowed to use the money that they've made to improve the society as a whole through their own and less poverty and all of this stuff. i think the argument about what you are saying if your argument is that businesses need to do what is right, what you think is right may be very different from what i think is right, you have injected this aspect of kind of
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judgment and all these questions into this and that and gets away from the simplicity of the profit maximization and could in fact get in the way of it. what would be the response to that? >> guest: i have a number of responses. first the paradigm that you articulated has held its way for decades now. a business's reputation as 19%. it's not seen as fundamentally good, it is greedy and explicative and it's only caring about money. so, simply the first response is from a marketing standpoint if you want to promote capitalism, you are going about it with a bad strategy. you're not winning, you are playing into the hand of the enemies and the critics and reinforcing what they believe that all you care about is money. you don't carry out anything else, so that's my first response. my second response is likely that the profit of paradox,
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profit paradox and i use and technology to explain bush's happiness. if you want to be happy in life and most people do, what i've discovered in my as i've gotten older and more mature is the absolute worst strategy to achieve happiness in life is to make that your primary goal. if you make happiness, actually but you are striving for you will not achieve it. instead you will end up being narcissistic and self involved in caring about your own pleasure and satisfaction in life as you're paramount goal delayed by values happinesses best found as a byproduct of other things. it is a by-product of meaningful work and family and friends and good health and love and care. we get happiness not by aiming for it but by throwing ourselves into the project involving
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ourselves and fundamentally trying to have integrity and be a good person. if we do those things, happiness will be one of the things that comes as a result. i am very happy person. it's come as a byproduct. i think profits are pretty similar. if you make them your primary goal you set up the stakeholders but it doesn't. it does the opposite. if people think that you are in debt for your own self-interest and the shareholders are strictly for their own self-interest there is no higher purpose that you are not the stakeholders and if so what is to keep everybody from taking their own short-term interest and to play look what is best for them and always what is best for them and they don't care what the organization or the store and if it is in their best interest to shoplift and get away with it then why wouldn't they do that? why would they work hard if they can get away with it is in the short term interest to do so.
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if they are looking out for their own profit, if everybody is looking out for their own profit, then you're not going to have the solidarity or the alignment that you are talking about. instead, everybody -- the system also about to rise itself because of your buddies looking out for their own personal profits and instead, when we unite people it is a more transcendent purpose that alliance all the different stakeholders around that, and of course they are still self interested. you cannot create the good society on the basis of your own personal self-interest. we are a lot more complex than that. we also love and care and are idealistic and follow the transcendence of the values and that is what leads to the good society and happiness is to go after the good, the true, the beautifully and the heroic into the metabolizing those values
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and your business will flourish at the same time. you can't get there by putting the cart before the horse. you try to make profits of the thing that unites all you also optimize and i would love competing the businesses that are thinking that way. >> host: he did say in that debate john mackey and i agree on 95%. he just says it better than i do. he says it my search so his argument in that debate was of course the company wants its business employees to be happy and of course the company wants a high your purpose and the reason for doing all those things is because when you do them well, you make more profits. >> guest: that is the investor perspective of course but if you take the perspective of the other speakers, they see it differently. >> host: so this isn't just marketing? >> guest: it isn't just
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marketing. friedman was talking about that, but part of my response is, and i think i might have said something in the debate i had with him, then say it. if you say that it's about creating value for these other stakeholders then say that, too. don't just say that it's about at least it leads to the misunderstandings and it plays into the enemy's arms infected is the greatest creator in the history of the world. capitalism is the greatest form of cooperation ever. let's tell that story about all of the value that we create not just for the investors that all the other stakeholders as well. it's partly better branding and marketing. but it is also a revolution in the way the we think about it. we start thinking about the good of all of the stakeholders and not just hour own personal good and the good of the investors.
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it's more robust it is just a better picture of what the business is all about. and of course we have to create value for the investors as well and you shouldn't sub optimize the value of creation for investors and i would argue the way we are putting this forward is a better way to create more value for the investors as well. when you put the investors first on happiness you are going to solve optimize happiness and investor creation. >> host: isn't there a limit to this? we talked about this in a different form before. so the higher purpose is giving people traces to eat better. you actually talk about what you view that as being as a plant based diet for instance. you, yourself are avian separately from the whole foods mission you made the point and a lot of people have thought livestock are not the world takes a toll on the environment, etc.. yet you meet in the stores and
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we talk about this some people would say okay well here is john mackey talking about how we have to do the right thing and this is a greater mission and purpose and on the other side he's chasing profits. how do you put those together? >> guest: perfection is not one of the options we have and i don't think it is a trade-off. oftentimes if you look for the trade-offs you will find trade-offs. that is the we the the amount of local mind works. it goes in and tries to take things apart and find the trade-off. i say when you find the trade-off in the business it is a failure of imagination and creativity that couldn't find or hasn't yet found that strategy. in in the example that you use, the reality of the fact is that we are in business to serve our customers and our customers vote when they come into our stores and if we are not prepared to sell them the food they want to buy it isn't so much that we are
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chasing profits as we are trying to create value for the customers and they decide what is valuable to them. now, we have a responsibility to try to educate them, to try to influence them but at the end of the day we serve them and they decide what is a value to them. we don't decide that for them and i wouldn't want to live in a society where the experts are making the decision for everybody what is good for everybody else. i don't like the way that our society is drifting in that direction. fighting people are responsible for themselves and accountable for their choices that they should have the freedom to make their own choices. businesses ultimately serve as customers and if you ever forget that you will fail as a business. that said as an example we only sold about 5% of our total sales in organic food and now 30 plus years later we're up to 50% and that is educating the customer
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base over a 35 year period. we are also trying to educate about healthy diet and eating. people deal with food addictions it's not like they can just shift over night but over time we are educating people to make different choices. the customer is devoted the less healthy stuff out of the store because they just stop buying it but until they do that we are in business to serve them. >> host: you talk to get food addiction. i am drawing for you to explain this to me. you talk in the book very eloquently about in the beginning when you are talking about capitalism, the voluntary exchange. this is one of the winds of capitalism. people want to buy something as a company that provides it and everyone benefits in the end. i was struck by the fact that leader in the book you were critical of some companies to you simply do not think are doing the right thing and they
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exist to provide products to people that you think are unhealthy. you talk about tobacco companies and junk food companies. what is interesting to me this is something you care very deeply about because it is an aspect of your life that you are devoted to making sure people are eating more healthy and so that degree you think it is in some ways not right. these only problem i have with this and this is what i would like you to explain is it's always in the eye of the beholder. i could go out and find a five environmental activists that think not all of the companies are right because they produce a product or i could find five concerned mothers who think that nickelodeon should be shut down because they don't like the programming that it provides for their kids or feminists who think that martelle should be gotten rid of -- >> guest: you could get rid of every business.
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>> host: haven't we undermined the idea of the voluntary exchange? >> guest: we do not suggest in the book that the tobacco companies should be made illegal or the junk food company should be forbidden it is based on voluntary exchange and what the business is there to satisfy its customer base. fast food companies, for example, they have served a useful purpose. their products have been obviously overindulged but when you look at it historically, they provide convenience, consistency and affordability for many people where those are things people prefer. so, the challenge if i was running a fast food company would be how do we provide affordability, convenience and quality and consistency while
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upgrading and educating the customers to make choices i think even the fast food company like that can begin to nudge its customer base, not command them to do so but it can help overtime raise consciousness and i think in the sense they have a responsibility to do so. the tobacco industry is a tough case. >> host: is a conscious capital country? >> guest: i think they could if you look historically at where tobacco was thought about as something that calmed people down and helped them concentrate and relax. i think the tobacco company challenge is is there a way to evolve their product overtime to keep the good qualities people see when the use the product without the damaging impact. maybe that is not possible, but
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that they could be aspiring to. that being said, people have the right to smoke in my opinion if they wish to and i am not urging that tobacco be out law or we go to prohibition it true percentage of the population of criminals and with all of the negative things the prohibition causes in terms of the criminal society i think is a bad idea. that being said, again, you can see as someone who believes in a voluntary exchange of people making choices but at the same time attempting to raise the consciousness and educate people to make better choices for their own health and well-being. >> host: we only have a few minutes left but you are a ceo so you spend a lot of your time at your whole foods stores. what is it like to write a book? what is the process to use it in bed with your laptop and eat snacks or do you devote time to your day? >> guest: whenever bdy is
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working with candy bars and -- [laughter] i learned how to write a book. my co-author said this was his seventh book and i'm actually excited because i think i have three more books and me and i already plotting them out. he taught me how to -- we did a technology called mind mapping. so we were able to take the ideas that we wanted to get put forth in the book and organize them in a brainstorming type of a fashion through the software that you can do on the computer that really helps us organize the overall, and we could add to it or subtract as we fought a long, but it is the big picture for the book. and then when it came to doing the chapters we used a dictation software hooked up to the computers. i would look at the map and i would basically just talk through the chapter.
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the initial rough draft was verbally spokane. then you don't have writer's block now you have 5,000 words in the chapter pretty quickly. and you feel really good about it. then you've got to go do research, you have to edit and publish it and the other person comes in and puts their input cents a was written by both of us. >> host: is it mostly your voice or his? >> guest: we made the decision that would be my voice but obviously he did more work on this than i did and he has a higher standard of what is acceptable as a writer, so we were a great team and i enjoyed working with him. in the next book or two we are going to do those as well. >> host: thank you so much for taking time to do this and it was great to see you. >> guest: great to see you, too. thanks so much.
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>> that was "after words," booktv the signature program in which authors of the latest nonfiction books are interviewed by journalists, public policy makers, legislators and others familiar with their material. "after words" errors every weekend on booktv at 10 p.m. on saturday, 12 p.m. and 9 p.m. on sunday at 12 a.m. on monday the you can also watch "after words" online. go to booktv.org and click on "after words" and the book tv series and topics list on the upper right side of the page. here is a look at upcoming book fairs and festivals happening around the country. ..